July 2010
Volume 11 Issue 7
Diaspora
By Ted Konnerth
Diaspora: (“a scattering [of seeds]“)* is any movement of a population sharing common national and/or ethnic identity. The term diaspora refers to a permanently displaced and relocated collective.
I view the current transformation of the electrical industry as a diaspora. We’re at a unique time in history, we’ve endured a deep recession which has cast off thousands of narrowly trained, qualified talent and that talent is slowly being absorbed by companies that may not have been in existence five years ago. The LED industry is most apparent, with the emergence of 400+ new companies into an existing commercial lighting industry there was a need for industry-savvy talent. Those companies have slowly added industry talent to help them shape their products to meet customer needs. These newly hired employees will likely never return to the companies of the past; in essence, they’ve been scattered and permanently displaced into a world that didn’t exist 5 years ago.
The trends are similarly ongoing for the emerging markets of alternative energy sources. There is need for people who ‘get’ how to sell power generation, and power control systems for what is basically DC power into vertical markets that didn’t even know they had a need for solar or wind power. The same holds true for control systems, smart building technology, variable drives, and wireless sensors and alarm systems. The electrical industry, as it has existed for decades is no longer the same. The electrical industry has expanded exponentially and with that expansion, the traditional players remain with a smaller pie than they enjoyed in the past. The remodel, retrofit, energy-reduction market is largely developing outside of the traditional electrical industry. The blurring of the lines between electrical and electronic is a permanent affliction.
“Electrical bids” will now be comprised of the traditional parts: switchgear, lighting, wire/cable, devices, etc.; but now there are the additional bids for ‘electrical work’ that include: premise wiring, alarm systems, power generation, control systems, building automation systems, day-lighting controls, demand supply systems, light pipes, etc. Each of those products have a physical presence, within the same walls or plenums, but the trade specialties are narrowly defined, as are the manufacturers and distributors of those goods.
This diaspora has profound impacts on the recovery process. The electrical industry has lost significant quantities of talent to this new market. The ability to hire experienced talent for the economic recovery is already being hampered. The experienced talent has been scattered, displaced and unlikely to return to those companies who abandoned them in the down times.
We see several trends that are of concern to our clients:
- Hiring process. The hiring process to select and appoint a new employee has lengthened considerably. Time kills every deal. Delaying on a decision creates emotional responses that are unfavorable to concluding a hire. The candidate feels neglected or uninformed and goes away to another offer or remains with their current employer. Advice: if you’re not ready to hire, don’t start interviewing. It’s an enormous waste of time, money and emotional capital if you can’t make a decision quickly and lose the candidate you spent weeks in processing.
- Candidate reluctance. Clients have a belief that since the unemployment level is so high, a candidate is dying to accept any offer, under any terms. This is a complete myth. College-educated unemployment is less than 5%. Quality people are not standing in lines begging for work. There are some qualified people out of work, but the bulk of the people you would want to hire aren’t desperate.
- Rising salaries. Offers are being refused for lateral or minimal raises over current financial positions. The market hasn’t turned completely into a candidate-driven one, but the signs are there.
- Thinning pool. With the electrical diaspora, quality people are moving to new companies, learning new technologies and applying those technologies into traditional channels. They’re not likely to return to the past. That leaves the pool of experienced talent thin, and getting thinner.
The industry has changed. Those of you who haven’t changed, have been relegated to a smaller market. There’s still plenty of opportunity to make money in that smaller pool, but recognize that technology will expand the channels, not decrease them and that will ultimately lead to a battle for traditional products sold through nascent companies in a bundled sales process that will disintermediate the traditional players.
It’s exciting. It’s going to be an extraordinary run for many of us for the next decade. In short, “if you’re not changing faster than the world around you, you’re backing up”.
*Wikipedia
